Coronavirus (COVID-19) Benefits and income

This page contains information on measures introduced to deal with the coronavirus (COVID-19) pandemic and options for those whose benefits and income have been affected.

This content applies to Scotland

Universal credit

The Department for Work & Pensions has announced temporary arrangements aimed at supporting benefit claimants impacted by coronavirus. Among other measures, it has been announced that:

  • those affected by Covid-19 will be able to apply for Universal Credit and can receive up to a month’s advance upfront without having to attend a Jobcentre in person, and

  • until 31 July 2021, the minimum income floor will not apply to self-employed UC claimants. UC payments will be calculated based on monthly earnings instead

The minimum income floor was re-introduced after 31 July 2021. Self-employed claimants should be given a month's notice where the minimum income floor is being applied. [1]

From 6 April 2020, the standard allowance of UC was increased [2]. This increase is in place until 5 October 2021. [3]

Suspending third party deductions from UC

The DWP suspended some third party deductions (TPD), including repayments of rent arrears, until 10 May 2020. This could put tenants whose UC is subject to an automatic deduction for rent arrears at risk of eviction action if they have agreed to a repayment plan and this is interrupted as a result. Tenants in this situation should:

  • contact the landlord and arrange to repay any money that would normally be subject to a TPD for rent arrears

  • evidence the payment and if the payment is not successful, their attempts to make it

  • update their UC journal to note the fact that a TPD for rent arrears was suspended without a warning.

Local housing allowance

From 1 April 2020, the local housing allowance (LHA) rates were increased,so that they cover at least 30 per cent of market rents in each area. [4] The latest LHA rates are available on the Scottish Government page.

Housing benefit

In general no new claims can be made for housing benefit, most claimants must apply instead for universal credit. See the section Universal Credit.

However the follow claimants must still make an application for Housing Benefit from their local council:

  • they received or recently stopped receiving a benefit which included Severe Disability Element

  • they or their partner have both reached state pension age

  • they or their partner have been in receipt of Pension Credit since 15 May 2019

  • they live in temporary accommodation

  • their landlord is a charity of housing association and they provide care or support (for example sheltered housing)

LA Welfare Direct 4/2020 contains information about the Coronavirus Job Retention Scheme (CJRS) and the Self-Employment Income Support Scheme (SEISS), including how the schemes work and who is eligible to apply, and confirms that for the purpose of calculating the claimant's entitlement to housing benefit:

  • income obtained from employer under the CJRS is to be treated as earned income and this continues to be based on the number of hours the employee normally works

  • income obtained under the SEISS is to be treated as taxable income received from self-employment and is part of the self-employed income assessment for the tax year in which it is received.

Housing benefit for prisoners on temporary release

Prisoners on temporary release due to the coronavirus pandemic are eligible for housing benefit, provided they meet the standard HB eligibility criteria. The HB Circular A8/2020 clarifies that the amendment to the HB regulations enabling prisoners in these circumstances to claim HB will last eight months from 13 March 2020. [5]

Discretionary Housing Payment

Existing housing benefit claimants and people in receipt of universal credit who are still struggling to meet their housing costs can apply for Discretionary Housing Payment.

Scottish Welfare Fund

Tenants in financial difficulties may be entitled to assistance from the Scottish Welfare Fund.

The regulations governing the Scottish Welfare Fund allow a local authority to make more than three payments to an individual in a 12 month period if it considers there are ‘exceptional circumstances’.

The Social Security Secretary has written to each local authority noting that the Scottish Government consider the current circumstances to be ‘exceptional’ and confirming the provision of an additional £45 million for the Scottish Welfare Fund. [6]

Scottish Welfare Fund: Crisis Grants

The general restriction of Scottish Welfare Fund crisis grant payments to three per person per year has been waived during the COVID-19 outbreak.

Self-Isolation Support Grant

The Scottish Government will issue a non-repayable grant of £500 to workers on a low income who have been asked to self isolate through Test and Protect. This grant does not use public funds, meaning that clients with the right to live in the UK who have no recourse to public funds can also apply for the grant.

The client will pay income tax on the grant if it takes the client over their tax-free personal allowance. Self-employed clients must report the grant on their Self Assessment tax returns.

The client must meet all four eligibility criteria to receive the grant:

  1. Test and Protect or the Incident Management Team must have told either the client to self-isolate, or a child under 16 they are the parent or carer for, or someone over 16 who they are caring for

  2. they must be employed or self-employed

  3. they must show they will lose income because they can't work from home

  4. they must be on a low income or getting one of these benefits:

  • Universal Credit

  • Working Tax Credit

  • Income-based Employment and Support Allowance

  • Income-based Jobseeker's Allowance

  • Income Support

  • Housing Benefit

  • Pension Credit

  • Council Tax Reduction

Clients will need to apply through their local council within 28 days of starting their isolation period. If they are awarded the grant the payment should be made within 3 days of the confirmation. Clients should be prepared with the following information for their application:

  • a bank statement

  • proof of low income if they are not in receipt of any of the benefits listed above

  • proof of employment or self-employment

More information can be found on the Scottish Government's page on the Self-Isolation Support Grant.

Changes to Jobcentre Plus appointments

From March 2020, most in person appointments for existing claimants have been suspended. Claimants already in receipt of benefits will continue to receive them. At the moment, claimants are advised not to attend the Jobcentre Plus unless directed to do so, or unless exceptional circumstances occur.

Health and disability assessments

The DWP has confirmed that face to face appointments for the purpose of disability-related benefits can resume from May 2021 in Scotland, taking into account local lockdown restrictions. Claimants will receive letters inviting them for these assessments, which will be used alongside paper and telephone assessments. These will be for the purposes of determining health and disability benefits including:

  • Work Capability Assessments (WCAs) for claims for the additional health amount of Universal Credit and Employment and Support Allowance

  • Personal Independence Payment (PIP)

Help for employees

Furloughed staff

Where a company is unable to pay staff due to Covid-19 they may be entitled to government support. The support is intended to ensure that employees will continue receive at least 80% of their wages (up to a maximum of £2500/per month). The employer must apply for this assistance and employers should contact employees who are affected.

From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim the Coronavirus Job Retention Scheme grant for their normal hours not worked.

More information on this can be found on the UK Government page COVID-19 Guidance for employees.

Sickness/self isolation

Where an employee cannot work because they have COVID-19 and/or are following the government’s advice to self-isolate, they may be entitled to sick pay through a company scheme, or may be able to apply for Statutory Sick Pay (SSP). As of 13 March 2020, there is no waiting time, meaning that SSP is available from the first day of absence. [7]

Help for self employed

Where a client is self employed they may be eligible for a grant worth 80% of their trading profits for an initial period of three months (up to a maximum of £2,500 per month). The amount will be calculated based on average profits from last three years. This grant must be applied for before 13 July 2020.

This scheme has been extended. Eligible self employed persons will be able to apply for a second (and final) grant in August 2020.

This grant will be a taxable grant worth 70% of average monthly trading profits, paid out in a single instalment covering a further 3 months’ worth of profits, and capped at £6,570 in total.

The online service for the second and final grant is not available yet.

HMRC will contact anyone eligible for the scheme and invite them to apply online. Individuals are requested not to contact the HMRC right now as doing so will only delay work being undertaken to introduce the scheme. Information can be found at Gov.uk website Self Employment Income Support Scheme.

Sickness/self isolation

Self-employed are not entitled to statutory sick pay, however, they can claim universal credit (UC) because of COVID-19 illness or self-isolation and if they do, they will not be subject to the minimum income floor. [8] It means that the award for the time they are affected by Covid-19 will not be based on assumed earnings where they exceed the actual income from self-employment.

No recourse to public funds

COSLA has produced a framework to help local authorities to support people with no recourse to public funds (NRPF). The key points of this are:

  • Local Authorities have statutory Public Health duties to provide emergency accommodation to all people with NRPF who are roofless or rough sleeping during the pandemic in order to protect them from the virus and mitigate public health risks. This is in addition to continued duties to provide any support necessary to safeguard vulnerable people, including children in families with NRPF and adults with community care needs under devolved social care legislation.

  • Local Authorities can provide financial support, food or other emergency assistance, so long as the source of funding is not a prohibited public fund (such as the Scottish Welfare Fund) and can work in partnership (e.g. with third sector partners)  to ensure that support can be provided effectively. In circumstances where an individual is receiving assistance solely on public health grounds, this will be provided on a temporary basis, as part of an emergency response to the COVID-19 pandemic.

  • Any support provided and costs incurred should be clearly recorded and reviewed, in line with changes in public health advice and/or any relevant changes in UK immigration rules during this period.

The framework COVID-19 Response Planning: Supporting Migrants with No Recourse to Public Funds can be found on the COSLA website.

Homeowners

In addition to the general information on benefits and income there are further details about hardship options for homeowners on the page see Coronavirus (COVID-19) - Mortgage payment advice.

Tenant Hardship Loan Fund

The Scottish Government has introduced a Tenant Hardship Loan Fund directed towards people who have had their finances impacted by the coronavirus (COVID-19) pandemic and do not have other means of support. Many tenants may be entitled to non-repayable help, for example Universal Credit or Discretionary Housing Payments, and where such help is available this is likely to be a better option. 

Loans will be available for social and private tenants and the loan is interest free.

Criteria:

  • up to a maximum of nine months’ rent costs covering rent arrears and future rent,  

  • will only cover arrears which have arisen since 1 January 2020 

  • The loan can include up to a maximum of three months of future rent payments as part of the nine-month total.

Loan repayments will be deferred for six months and repaid over 60 months. 

The Tenant Hardship Loan Fund offers will be subject to an affordability assessment to check whether the applicant has enough surplus income, after other costs, to make the loan payments. 

The application process for the loan highlights that there may be other more appropriate financial support options available to them and will signpost people to sources of further advice and support before making an application. 

More information can be found in Tenant's Hardship Loan - Information for advice providers

In addition to the general information on benefits and income there are further details about emergency measures for tenants on the page Coronavirus (COVID-19) Eviction and security of tenure.

Further advice and resources

General information on pandemic-related changes to claims for benefits and a step-by-step guide to claiming universal credit are available on Gov.uk.

Citizens Advice have published a guide to benefits entitlement for those affected by coronavirus that includes more information about SSP and other hardship options for those unable to work or continue self-employment as a result of COVID-19.

The Department for Work and Pensions has published a collection of guides for members of the public whose income has been affected by the coronavirus pandemic, including information on what benefits are available and how to claim them:

Coronavirus (COVID-19): what to do if you were employed and have lost your job

Coronavirus (COVID-19): what to do if you’re employed and cannot work

Coronavirus (COVID-19): what to do if you’re self-employed and getting less work or no work

Coronavirus (COVID-19): what to do if you’re already getting benefits.

Last updated: 9 June 2021

Footnotes

  • [1]

    s.1 The Universal Credit (Coronavirus) (Restoration of the Minimum Income Floor) Regulations 2021

  • [2]

    reg 3 Social Security (Coronavirus) (Further Measures) Regulations 2020/371

  • [3]

    s.2 Universal Credit (Extension of Coronavirus Measures) Regulations 2021

  • [4]

    reg 4 Social Security (Coronavirus) (Further Measures) Regulations 2020/371.

  • [5]

    para 14 of reg 7 The Housing Benefit Regulations 2006 SI 2006/213 and para 14 of reg 7 The Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 SI 2006/214, as amended by Social Security (Coronavirus)(Prisoners) Regulations 2020 SI 2020/409; HB Circular A8/2020.

  • [6]

    Scottish parliamentary question: Shirley-Anne Somerville’s written answer 27th March 2020 can be found on the Scottish Parliament wesbite

  • [7]

    reg 2 Employment and Support Allowance and Universal Credit (Coronavirus Disease) Regulations 2020/289

  • [8]

    reg 2 Social Security (Coronavirus) (Further Measures) Regulations 2020/371; reg 4 Employment and Support Allowance and Universal Credit (Coronavirus Disease) Regulations 2020/289